Government Contracting Glossary

Hisham

October 12, 2024·16 min read

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Government contracting involves the procurement process through which private businesses provide goods and services to government agencies. The process is governed by strict regulations, making it essential to understand the common terms and definitions used within the industry. This glossary offers a comprehensive list of key terms to help businesses navigate the world of government contracting successfully.

Section 1: Basic Terms in Government Contracting

1. Government Contract

A government contract is a legally binding agreement between a private sector company and a government agency to deliver specific goods or services. Contracts may be structured as:

Fixed-Price Contracts: The price is predetermined and remains unchanged regardless of actual costs.
Cost-Reimbursable Contracts: The government reimburses the contractor for allowable costs incurred plus a fee or profit.
Time and Materials (T&M) Contracts: Payment is based on actual labor hours and material costs used to complete the project.

2. GovCon

Short for government contracting, GovCon refers to the entire process through which private companies provide goods and services to government agencies. These contracts operate under strict procurement regulations designed to promote fairness, transparency, and the best value for taxpayers.

3. Solicitation

A solicitation is an official document issued by a government agency inviting businesses to submit bids, proposals, or quotations for specific projects. Common types of solicitations include:

Request for Proposal (RFP): A detailed document seeking formal bids from contractors to provide goods or services, including project requirements, evaluation criteria, and submission guidelines.
Request for Quotation (RFQ): Used to obtain pricing information for smaller or straightforward projects.
Invitation for Bids (IFB): A formal invitation for sealed bids, typically used in competitive, price-driven procurements.

4. Request for Proposal (RFP)

An RFP is a type of solicitation where the government outlines a project’s scope, goals, and requirements, inviting contractors to submit comprehensive proposals. Proposals typically include:

Pricing details
Work plans
Capabilities and qualifications
Compliance with requirements

5. Bid or Proposal

A bid or proposal is a formal response submitted by a company to a government solicitation. It outlines how the company will meet the government's requirements, including:

Proposed pricing
Project methodology and work plan
Evidence of technical expertise and qualifications

6. Prime Contractor

A prime contractor is the main company awarded the government contract. The prime contractor is responsible for:

Managing the overall project
Delivering goods or services
Ensuring compliance with contract terms and government regulations

7. Subcontractor

A subcontractor is a company hired by the prime contractor to perform specific tasks, provide specialized services, or supply goods under the main government contract. Subcontractors work under the direction and oversight of the prime contractor.

Section 2: Common Procurement Terms

1. Procurement

Procurement refers to the method government agencies use to purchase goods or services from private companies. This process is formalized through contracts and follows specific rules to ensure fairness and efficiency.

2. Contracting Officer (CO)

A Contracting Officer (CO) is a government official with the authority to:

Negotiate contract terms
Finalize and award contracts
Oversee the execution of contracts
End contracts when necessary

3. Contracting Officer Representative (COR)

The Contracting Officer Representative (COR) is appointed by the Contracting Officer to:

Supervise the contractor’s work
Verify that contract terms and deliverables are being met
Act as the point of contact between the contractor and the Contracting Officer

4. Contracting Officer Technical Representative (COTR)

A Contracting Officer Technical Representative (COTR) focuses on the technical side of a contract. They ensure the contractor’s performance aligns with the contract’s technical specifications and quality standards.

5. Federal Acquisition Regulation (FAR)

The Federal Acquisition Regulation (FAR) is a detailed framework of rules governing how federal agencies procure goods and services. Its purpose is to ensure consistency, transparency, and compliance across all federal procurement activities.

6. General Services Administration (GSA) Schedule

The GSA Schedule is a procurement program managed by the General Services Administration. It offers pre-negotiated contracts with approved vendors, enabling federal agencies to purchase goods and services more efficiently and often at discounted rates.

7. Competition in Contracting Act (CICA)

The Competition in Contracting Act (CICA) mandates that federal agencies encourage open competition when awarding contracts. This helps ensure that taxpayer dollars are spent effectively while promoting fair opportunities for businesses.

8. Small Business Set-Asides

Small Business Set-Asides are initiatives that designate certain government contracts exclusively for small businesses. These programs help level the playing field, encouraging small business participation in federal contracting.

Section 3: Contract Types and Pricing Structures

1. Firm Fixed Price (FFP) Contract

A Firm Fixed Price (FFP) Contract is an agreement where the price is set and agreed upon before work begins. The final cost remains unchanged, regardless of the actual expenses incurred by the contractor during the project.

2. Cost-Reimbursable Contract

In a Cost-Reimbursable Contract, the contractor is reimbursed for all allowable and reasonable expenses related to the project. These contracts often include an additional fee or profit for the contractor. Common variations include:

Cost-Plus-Fixed-Fee (CPFF): Adds a predetermined fixed fee to the reimbursed costs.
Cost-Plus-Award-Fee (CPAF): Includes a performance-based award fee that incentivizes quality work.
Cost-Plus-Incentive-Fee (CPIF): Offers an adjustable fee based on achieving specific cost or performance goals.

3. Time and Materials (T&M) Contract

A Time and Materials (T&M) Contract pays the contractor based on actual time spent (labor hours) and materials used during the project. This structure works well when the scope of work is not fully defined.

4. Indefinite Delivery, Indefinite Quantity (IDIQ) Contract

An Indefinite Delivery, Indefinite Quantity (IDIQ) Contract provides flexibility for the government to order an unspecified amount of goods or services within a set time frame. This contract is commonly used for long-term projects where demand can vary.

5. Blanket Purchase Agreement (BPA)

A Blanket Purchase Agreement (BPA) is a streamlined procurement method that allows agencies to purchase goods or services as needed. BPAs are typically set up with pre-approved vendors who offer pre-negotiated pricing, simplifying the ordering process for recurring needs.

You can learn more about the different types of government contracts here.

Section 4: Solicitation and Award Types

1. SBIR (Small Business Innovation Research)

The SBIR program provides non-dilutive funding to small businesses for research and development (R&D) projects. It supports innovation and helps companies commercialize new technologies.

2. OTA (Other Transaction Authority)

OTA is a flexible procurement method primarily used by the Department of Defense (DoD) and other agencies. It enables the government to acquire innovative research, prototypes, and technologies outside the traditional contracting process.

3. CRADA (Cooperative Research and Development Agreement)

A CRADA is a partnership where a government agency collaborates with a private-sector company on R&D projects. This agreement promotes joint innovation without the transfer of funds.

4. PIA (Partnership Intermediary Agreement)

A PIA is an agreement between a government agency and a non-profit intermediary. Its purpose is to advance technology transfer and promote the commercialization of government-funded research.

5. Letter Contract

A Letter Contract is a temporary, legally binding agreement issued to allow work to begin before the final contract is fully negotiated and signed.

6. Indefinite Delivery, Indefinite Quantity (IDIQ)

An IDIQ contract allows for the delivery of an unspecified quantity of goods or services over a set period, offering flexibility for projects with varying demands.

7. MAC IDIQ (Multiple Award Contract IDIQ)

A MAC IDIQ is an IDIQ contract awarded to multiple contractors. It enables agencies to order goods or services competitively from a pool of pre-selected vendors.

8. MAS IDIQ (Multiple Award Schedule IDIQ)

The MAS IDIQ combines IDIQ flexibility with the GSA Schedule program. It allows federal agencies to acquire goods and services efficiently from multiple approved vendors.

9. GSA Schedule

The GSA Schedule is a program offering pre-negotiated contracts with approved vendors, providing streamlined procurement for federal agencies.

10. Full and Open Competition

Full and Open Competition ensures that all qualified vendors have an equal opportunity to compete for a contract. This process promotes fairness, transparency, and best value for the government.

11. Small Business Set-Aside

A Small Business Set-Aside reserves specific government contracts exclusively for small businesses to foster participation and economic growth.

12. Sole Source

A Sole Source award occurs when only one vendor is deemed capable of providing the necessary goods or services, resulting in a non-competitive contract.

13. Single Award

A Single Award contract is issued to one contractor to fulfill the requirements of a specific project or procurement.

14. Multiple Award

A Multiple Award contract is issued to two or more contractors. It enables competition for individual task or delivery orders among the selected vendors.

This section highlights the various types of solicitations and award mechanisms used in government contracting, helping businesses identify opportunities and understand the procurement landscape.

Section 5: Competition

1. Full and Open Competition

A procurement process that allows all responsible sources to compete, including large businesses. Full and open competition ensures that the government receives the best price and highest quality products or services by encouraging a wide range of bidders.

2. Pre-Solicitation

A notice issued before a contract opportunity opens for proposals. Pre-solicitations allow the government to gauge contractor interest and assess their capability to perform the required work.

3. Sources Sought Notice

A formal announcement by a government agency seeking information about potential sources for an upcoming project. It is not a solicitation or a request for proposal but helps agencies determine whether small businesses can perform the work, supporting the decision to set aside contracts for small businesses.

4. Small Business Set-Aside

A procurement method where contracts are reserved exclusively for participation by Small Business Concerns (SBCs). Set-asides can be:

Full Set-Aside: Open only to small businesses.
Partial Set-Aside: Specific portions of the contract reserved for small businesses.

5. Broad Agency Announcement (BAA)

An announcement that outlines a government agency's research areas of interest and invites proposals for innovative solutions. Typically used for research and development (R&D) projects, BAAs focus on solving specific problems or advancing technologies.

6. Special Notices

Announcements providing information about industry events, procurement updates, or other relevant opportunities not covered in standard funding solicitations.

7. Request for Information (RFI)

A formal method for gathering information about contractor capabilities, pricing, and solutions without the intention of awarding a contract. RFIs allow businesses to showcase their expertise and shape future solicitations.

8. Requests for Proposals (RFPs)

Used in negotiated acquisitions, RFPs detail the government's needs and invite contractors to submit formal proposals. Key components of an RFP include:

Expiration Date
Contact Information
Statement of Work (SOW): Outlines the project requirements and deliverables.
Eligibility for Set-Asides

9. Requests for Quotes (RFQs)

An RFQ solicits pricing and delivery details for commercially available products or services. It is typically used for straightforward procurements that do not require complex proposals.

10. Other Transaction Agreement (OTA)

A flexible procurement method for research, development, and prototyping projects. OTAs are not standard contracts, grants, or cooperative agreements and are only available to agencies with OT authority.

11. Best Value

A source selection process where the government evaluates proposals based on factors like cost, technical capabilities, past performance, and innovation. The goal is to select the most advantageous offer that delivers the highest overall value to the government.

12. Lowest Price Technically Acceptable (LPTA)

A selection method where the government awards the contract to the lowest-priced proposal that meets the minimum technical requirements. Cost is prioritized over innovation or past performance.

Section 6: Business Development

1. Bid-Matching Service

Tools and platforms like samsearch that help businesses identify relevant government contracting opportunities.

2. Business Development Pipeline

A structured process for tracking, evaluating, and pursuing government contract opportunities. The pipeline includes:

Identifying potential opportunities.
Assessing strategic fit and profitability.
Moving opportunities through the capture and proposal stages.

3. Capture Stage

The process of gathering intelligence, analyzing the competition, and positioning your company to win an upcoming opportunity. Key activities include:

Conducting market research.
Building relationships with agency decision-makers.
Developing a capture strategy.

4. Opportunity Assessment

An evaluation process to determine the suitability of a contracting opportunity. Factors considered include:

Profitability
Win Probability (Pwin)
Strategic Alignment

5. Opportunity Shaping

The proactive process of influencing a procurement's requirements, scope, and evaluation criteria to align with your company’s strengths. This increases the likelihood of winning while ensuring added value for the government agency.

6. Proposal Stage

The phase where contractors draft, refine, and submit a bid or proposal in response to a solicitation. Success in this stage relies on:

Understanding the Statement of Work (SOW).
Aligning the proposal with the customer’s requirements.
Emphasizing win themes and unique strengths.

7. Proposal Writing Color Teams

A collaborative framework used in proposal development. Different teams focus on specific areas of the proposal, ensuring quality, compliance, and competitiveness.

Blue Team

Develops the proposal strategy.
Conducts competitive analysis.
Creates win themes and outlines the approach.

Pink Team

Reviews the initial proposal draft.
Ensures compliance with solicitation requirements.
Evaluates the clarity and completeness of content.

Red Team

Performs a critical review of the near-final proposal.
Focuses on persuasiveness, accuracy, and compliance.
Identifies weaknesses or gaps in the proposal.

Green Team

Reviews and finalizes the cost and pricing strategy.
Ensures the proposal's price aligns with the win strategy and remains competitive.

Gold Team

Conducts an executive-level review of the final proposal.
Ensures the document aligns with win themes and strategic goals.
Provides final approval for submission.

White Team

Offers an independent, objective review of the proposal.
Evaluates overall effectiveness and identifies lessons learned for future submissions.

Capture Team

A group of dedicated professionals who strategize, plan, and pursue contract opportunities by:

Analyzing client needs
Assessing the competitive landscape
Directly engaging with customers and industry partners to shape opportunities

The Capture Team may or may not directly write the proposal.

Bid and Proposal Team

A specialized group of professionals responsible for preparing and submitting comprehensive, persuasive, and compliant proposals. Their goal is to showcase a company's:

Capabilities
Expertise
Value proposition

The Bid and Proposal Team typically includes:

Proposal Manager: Oversees and coordinates the proposal process.
Technical Writer: Develops clear, detailed, and solution-oriented content.
Pricer: Prepares cost proposals, ensuring competitiveness and compliance.
Review Participants: Conduct various reviews (e.g., color team reviews) to enhance the quality and compliance of the proposal.

Section 6: Contract Compliance and Performance

1. Performance Work Statement (PWS)

A document that defines the tasks, deliverables, and performance standards required for a government contract. The PWS focuses on outcomes rather than specific methods, allowing contractors the flexibility to determine how best to meet requirements.

2. Statement of Work (SOW)

A detailed document that outlines:

Scope: The extent and boundaries of work to be performed.
Objectives: The desired goals and outcomes.
Deliverables: Specific items, reports, or results required.
Performance Requirements: Standards and conditions that must be met.

Unlike a PWS, the SOW often specifies how the work must be done.

3. Quality Assurance Surveillance Plan (QASP)

A government-developed plan that establishes how contractor performance will be:

Monitored
Evaluated
Documented

The QASP ensures compliance with contract requirements and helps identify areas for improvement or corrective action.

4. Contract Disputes Act (CDA)

The CDA governs how disputes between contractors and government agencies are resolved. Key points include:

Contractors can submit claims for performance disagreements or contract interpretation issues.
Agencies must respond within a designated timeframe.
Disputes unresolved at the agency level may be escalated to the Boards of Contract Appeals or the Court of Federal Claims.

5. Termination for Convenience

The government's right to terminate a contract at any time, without cause, before its completion. When invoked:

The contractor is paid for work performed up to the termination date.
Contractors may also receive reimbursement for reasonable costs incurred due to the termination.

This protects the government’s flexibility when requirements change.

6. Termination for Default

A serious action where the government terminates a contract because the contractor:

Fails to deliver on time.
Fails to meet performance standards.
Breaches other terms of the contract.

Consequences may include:

Financial penalties.
Negative performance reviews impacting future contract eligibility.
Potential restrictions or debarment from federal contracting.

Section 7: Government Contracting Regulations and Programs

1. Buy American Act

Legislation requiring federal agencies to prioritize purchasing:

U.S.-made products
Materials produced in the United States

Exceptions may apply for certain trade agreements, cost concerns, or when domestic alternatives are unavailable.

2. Trade Agreements Act (TAA)

The TAA governs the procurement of goods and services from foreign sources when trade agreements are in place. Under the TAA:

Contractors must source products from countries with approved trade agreements.
Non-TAA-compliant products are generally restricted in federal procurements.

This ensures fair international trade while balancing domestic priorities.

3. Prohibitions of Certain Telecommunications

Government regulations prohibit the use of telecommunications equipment or services from companies deemed national security threats.

Commonly associated with specific Chinese manufacturers.
Contractors must certify compliance and avoid using restricted equipment in their systems or supply chains.

4. NIST 800-171

The National Institute of Standards and Technology (NIST) Special Publication 800-171 establishes cybersecurity requirements for contractors handling:

Controlled Unclassified Information (CUI)

Key areas include:

Access control.
Incident response.
Data encryption.

Contractors must implement these safeguards to protect sensitive government data.

5. CMMC 2.0 (Cybersecurity Maturity Model Certification)

A standardized cybersecurity framework for companies working with the Department of Defense (DoD). CMMC 2.0 introduces:

Three Certification Levels: Basic, Intermediate, and Advanced.
Requirements tailored to the sensitivity of the information being handled.
A focus on self-assessments, third-party certifications, and government-led assessments based on contract needs.

Compliance with CMMC 2.0 is essential for contractors seeking DoD contracts that involve sensitive or classified information.

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